MGM Takes a Beating

Remembering now that I had wanted to mention to you the Supreme Court’s recent copyright ruling in Petrella v. MGM.

The case is just out last week and quite important. It involved the heir to one of co-writers of the three works giving rise to the film “Raging Bull.” I say three works because first there were 2 screenplays (one in 1963 and the other in 1973), and then there was a book (written in 1970). Each work was governed by the 1909 Act, so they required renewal. Under that Act, as the Court held in Stewart v. Abend, if the original author died prior to renewal, his/her heir could renew and recapture all copyright interest unburdened by any assignment previously made by the author.

That’s what happened here. Petrella’s dad had co-written the works with Jake LaMotta, and dad/Jake had entered into deal with UA (a subsidiary of MGM). After her dad died, Petrella renewed the copyright in the ’63 screenplay (but blew the deadline for the other works). She renewed in 1991, and although she contacted MGM and said they were violating her copyright by promoting the film, repackaging, distributing it etc., she didn’t bring her action for copyright infringement until 2009. This was in part because – as she put it – she was waiting for the film to make some money.

MGM moved for summary judgment on the ground Petrella waited too damn long to file suit (and that it had incurred expenses, as a result of that delay). The district court granted MGM’s motion and the appellate court affirmed. MGM expected a slam dunk at the Supreme Court hearing; it had top guns doing its bidding and they did well at oral argument.

The Court surprised them. It held that laches cannot be invoked as a bar to a claim for damages brought w/I the Act’s 3-year window (even where, as in this case, action was filed nearly 2 decades after accrual of claim), although it said that laches may be available to curtail equitable relief at the outset of the litigation. The Court also noted that if Petrella had engaged in any fraud with respect to promising not to file a claim for purposes of luring UA/MGM into investing in the film (something they found had not occurred), MGM could have asserted a defense of estopple.

This case gives us an important copyright ruling as laches had previously been permitted in copyright actions. It’s also important given the Court’s reasoning: e.g., that by permitting a successful plaintiff to gain retrospective relief of only three years back from the time of suit, the copyright statute of limitations itself takes into account the penalty for any delay. Also, it said that laches originally served as a guide when no statute of limitations controlled, which was not the case under the current Copyright Act.

Hope this is helpful.

Jonathan Pink co-Chairs the Entertainment Group at Lewis Brisbois, a national law firm with nearly 1000 attorneys. He is resident in the firm’s L.A. office, and can be reached at jonathan.pink@lewisbrisbois.com.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.